Zaps. Com employees. The reasons behind this acquisition reflect back to the business philosophy of Jeff Bozo, CEO of Amazon. Mom and his vision to plan strategically for the long term, as proven by this statement In a recent annual report; “Our financial focus is on long-term, sustainable growth in free cash flow per share. Free cash flow is driven primarily by increasing operating Income and efficiently managing working capital and capital expenditures. Increases in operating income primarily result from increases in sales through our websites and efficiently managing our operating costs, offset by investments we make in longer-term strategic Initiatives,” (2009, Annual Report) Affect on Cost Amazon. Mom procurement of its strategic initiative, Zaps. Com would positively affect its cost. Zaps. Com has over 100 shareholder and investors who will be exchanging their Zaps stock for Amazon’s stock and when this was done, Amazon came the only stockholder of Zaps’ stock. This will increase the cost of their stock per share in the marketplace. Amazon and Zaps each had a large customer base before Amazon decided to buy Zaps.

Now that Amazon has acquired Zaps they have expanded their customer base even more and boast one of the largest for any company in this market. Both Amazon and Zaps are focused on growth; this means they will need to hire more people to help them grow. This growth will cause some of their variable cost to increase, but invariably will also increase profitability and positive cash flow. According to Zaps’ executives, “there is no company that caters to Its customers in the manner that Zaps does. ” (2009) Zaps gives free shipping on every order as well as returns.

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These returns are accepted for a full year after the date of purchase, they have a no questions asked policy on returns and they sit out Tree coffee Tort ten customers on Attlee VISIT TTS Laptops’ employees love working for the company and training them to be effective and emphatic bears its cost, (many companies see training as Just another expense and too costly), but Zaps decided it would be worth their while to endure that cost. Affect on Sale The initiative will affect the organization’s financial planning in two forms, sales and cost.

Amazon’s goal has always been long-term growth and improving the customer experience as stated in the 2009 annual report “To increase product sales, we focus on improving all aspects of the customer experience, including lowering prices, improving availability, offering faster delivery times, increasing selection, increasing product categories, expanding product information, improving ease of use, and earning customer trust” (2009, Annual Report). This dedication to the consumer oneness well with the Zaps. Com fanatical devotion to customer service. Zaps. Com is a dynamic online company started in 1999 to sell shoes.

Zaps has grown to offer a wide variety of products since then. The CEO Tony Whish has helped grow the company to one billion in gross sales as of 2008. The company became profitable in 2006 and boasts a corporate culture unlike any other. Max Chaffinch (2009) of Inc. Magazine writes, “At many companies, talk of corporate culture dulls the luster, inducing cynicism among employees and creating hours of busy work for managers. At Zaps, the culture is the luster. Zaps’ unparalleled responsiveness to customer queries is an industry leader, as is their free shipping and return policy.

The prospect of combining the customers of the two website and more important the sale and profit of the entire apparel was too attractive. However, this announcement, according to the SEA, contains forward-looking statements within the meaning of section 2/A AT ten securities Act AT AY Ana Stetson 21 E AT ten securities Exchange Act of 1934 (The free library, 2009). Forward-looking statements reflect current expectations are inherently uncertain and are subject to known and unknown risks, uncertainties and other factors, and results may differ significantly.

Several factors that could cause future results to differ materially from expected results include, but are not limited to effects of the merger on Amazon. Comb’s financial results. The potential inability to operate successfully Zaps’ businesses is a real risk, including the potential inability to retain customers, key employees or vendors. In addition, risks related to competition, management of growth, new products, services and technologies along with the potential for fluctuations in operating results, and international expansion are all cause for concern.

Other serious and potential risks include the outcomes of legal proceedings and claims, fulfillment center optimization, seasonality, commercial agreements, acquisitions and strategic transactions, foreign exchange rates, system interruption, inventory, government regulation and taxation, payments, and fraud (Free library, 2009). All the potential risks named, if realized could seriously affect or even decrease Amazon’s shareholders wealth, which would ultimately defeat the purpose of the acquisition. Conclusion

The long-term goal for Amazon is creating synergy between the brands that will result in sales growth, efficient operations and improved shareholder equity. Amazon. Com was already the master of online product distribution. Zaps. Com and Amazon. Com both share a passion for serving customers. Amazon. Com purchase of Zaps. Com will create an all over increase and will enhance Amazon’s portfolio making them a larger conglomerate financially. Potential risks are also inevitable, but with proper planning, organizing, controlling and leading, success is definitely attainable. Section 2 IA AT ten securities Act AT AY Ana Stetson